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Today’s read: 9 minutes.
The fight over small-business loans, a question about the legality of stay-at-home orders, real doctors vs. TV doctors and how you can use your stimulus check to help fight the coronavirus.
Dr. Phil, who has a PhD in clinical psychology, set off a firestorm this week by insisting it was time for the United States to reopen. Photo: Wikicommons
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Coronavirus quick hits.
As the historic coronavirus story continues to unfold, there is so much news it’s often hard to cover it all in single, less-than-10-minute read. To keep you appraised of important info, I will occasionally do some “quick hit” updates on the coronavirus.
- Yesterday, The Wall Street Journal published an in-depth report on America’s testing failures. WSJ’s reporting indicates laboratories and states are facing “a thicket of supply shortages, widespread test backlogs, unexpected snafus and unreliable results, often with no referee—prolonging the national crisis.” While we’ve tested almost the same rate of the population that South Korea has, a country often heralded as the best in the world, our testing came online much more slowly and results have taken much longer to get back. “It is a little bit insane. Everyone is running around trying to get as much as they can from every vendor,” David Grenache, the lab director at TriCore Reference Laboratories in Albuquerque, N.M., said. “Laboratories are competing with each other to get needed resources.” Click.
- Speaking of testing… The antibody tests, which are designed to figure out who has already had the coronavirus and may now be immune to it, are not yet delivering, according to The New York Times. The tests, made in China, are often inaccurate, some doctors are misusing them because of confusing instructions, and the supply for the tests is just a fraction of the demand. In the meantime, it may be an exercise in futility anyway. A number of coronavirus patients have retested positive for the virus, indicating we may not understand how antibodies work in response to COVID-19 and a large chunk of the population becoming immune isn’t actually in the cards. Click for the antibody test story. Click for the immunity story.
- Now, for some good news: an Oxford professor of vaccinology who is leading COVID-19 vaccine trials says it’s possible a coronavirus vaccine is available by autumn. The timing is “ambitious but achievable,” Bloomberg reported. The company behind the trial is already ramping up manufacturing, anticipating that its final stage trial of 5,000 adults will go well. The World Health Organization says there are 70 vaccine candidates in development, and just three others (besides the Oxford study) are in human trials. Click.
What D.C. is talking about.
A new round of PPP. That’s the Paycheck Protection Program, or the small-business lending fund you have probably been hearing about. It’s run by the Small Business Association (SBA). The fund was created as a response to the coronavirus pandemic in order to help incentivize small businesses to keep their workers on payroll — and to keep those businesses afloat. It allocated $349 billion in forgivable loans for small businesses to pay their employees, so long as that money was used to cover payroll costs, mortgage interest, rent or utility costs in the 8 weeks after the loan was given. Employee and compensation levels also needed to be maintained.
Last week, the fund went dry after days of warning from lawmakers and business leaders that demand was too high. Around 1.6 million companies were given loans. There was also a major public backlash after news outlets reported that millions of dollars went to chain restaurants or hoteliers and publicly traded corporations rather than the small businesses that were supposed to get help from the fund. Shake Shack made news after it returned $10 million it was awarded through the program.
Now, Congress is trying to re-up the cash on hand to begin giving out more of the loans. A $470 billion deal is being negotiated, $310 billion of which would go straight to re-upping the PPP fund. Another $60 billion would go to the Economic Injury Disaster Loan program, a second small-business lending program that ran out of money. The agreement would also send another $75 billion to hospitals and $25 billion for testing. Democrats and Republicans disagreed on the additional money for hospitals and testing, and now there is a fight brewing over whether more money should be given out for states and cities — a Democratic demand.
What the right is saying.
Republicans began stepping up their attacks last week when it was obvious the loan program was going dry and they felt like Democrats were dragging their feet to stuff a new bill full of lefty priorities. Mitch McConnell tried to pass a clean $250 billion funding increase last week, but Democrats rejected it. “It has been stunning to watch our Democratic colleagues treat emergency funding for Americans’ paychecks like a Republican priority which they need to be goaded into supporting,” McConnell said. The Wall Street Journal editorial board criticized Democrats, saying they were holding the program “hostage” in order to demand hundreds of billions of dollars for city or state governments. But the feds already foot the bill for a third of state funding. The $2.2 trillion CARES Act handed out hundreds of billions of dollars of support for states, including unemployment funds and direct aid. Much of that money hasn’t even been spent yet.
“Giving more grants to the states will slow the recovery because it gives governors an incentive to stay locked down for longer,” the board wrote. “Trump’s reopening guidelines leave most of the key decisions to the states. But Democratic governors in particular won’t take the political risk of restarting their economies against liberal opposition if they know the feds will underwrite the cost of lockdown.”
On FoxBusiness.com, Joshua Ruah argued that the federal government has already given hundreds of billions of dollars over, including $25 billion for mass transit and $8.5 billion in community development funding. “These amounts should have been sufficient if states handled their finances properly,” he wrote. “The problem is that many of them do not.”
What the left is saying.
One of the big reasons Democrats slowed this thing down is to ask for money to be reserved for underserved communities, especially women or minority-owned businesses. Robert E. Rubin, the former Secretary of the Treasury under Bill Clinton, made the same argument in The New York Times. “Banks participating in the loan program are generally going to lend only to existing borrowers,” he wrote. “That excludes most small businesses in poor urban neighborhoods and distressed rural areas, potentially exacerbating these communities’ already acute problems. There should be additional funding, therefore, for Community Development Financial Institutions, which lend to small businesses in underserved communities.”
Democrats also made the case that money would need to go to states and cities soon — why not do it now? Adding the funds in this bill will quicken the economic recovery. It’s not just states or cities that have mismanaged their funds, either. New York is the easiest case to raise: the state is expected to lose between $9 billion and $15 billion in tax revenue. And the state has already committed more than $600 million to fight coronavirus. New York City alone could lose up to $6 billion over the next 15 months, and Mayor Bill de Blasio is asking city agencies to cut $1.3 billion in the budget. And this is for a state that was in a pretty stable economic state before the crisis hit.
With rumors there is a fundamental agreement in place, the left is reminding Americans that health experts have pushed for expanded testing capacity and Democrats had to fight for testing funding in this bill. More money should mean more widely available tests, which is key to getting the country back on its feet.
As Politico put it, “this was a debate largely about nothing.” Republicans and Democrats agreed on almost all of the raw policy issues, but the disagreements mostly came down to the order of operations. Mitch McConnell wanted a clean spending bill to refund PPP, and he was calling for it a week or two ago. Personally, I would have loved to see Democrats support that and pass more funds for the program through unanimous consent. I know about six or seven small business owners personally that applied for the PPP loans — I’ve heard of just one person who was approved. The funds are clearly short and the process is almost certainly happening too slowly to rescue the companies in need.
In a normal, functioning version of America, we would have been able to replenish the funds on a simple handshake agreement that the other priorities (like funding hospitals, state and city governments, or underserved businesses without prior relationships to banks) would quickly follow suit. Unfortunately, we don’t live in that version of America. And while Sen. McConnell (R-KY) is right that the PPP re-fund should have been taken up and passed weeks ago, he’s also partly to blame for the bitterly divided and dysfunctional state of the Senate chamber he leads. You reap what you sow.
Now, each side will get to cash in the political rewards of their partisan grandstanding while America suffers: Republicans will claim they held off Democrats’ calls to bail out cities and states (funding they’ll almost certainly cave on and provide later) while Democrats will say the delay to starving businesses was worth it because they got more money for hospitals and testing that was also going to come either way. By the way, a final deal may be further off than members of Congress or the press are letting on, so don’t be surprised if things get sticky again and we don’t see anything passed this week.
Did you know?
The restaurant industry has “sales that exceed the agriculture, airline, railroad, ground transportation, and spectator sports industries combined.” The National Restaurant Association sent a letter to Democrats and Republicans urging a restaurant-specific bailout. A survey of 6,500 restaurants found that 8 million restaurant employees have been laid off or furloughed, the restaurant industry lost $30 billion in March alone and will lose another $50 billion by the end of April. Over 60% of the restaurant owners surveyed said The CARES Act won’t keep employees on the payroll. Click.
Your questions, answered.
Reminder: Reader questions are a big part of Tangle. To ask a question, all you have to do is reply to this email and write in. Give it a try!
Q: What are your thoughts on the enforcement of the stay at home orders and whether or not they are constitutional? I feel we’re in a strange situation because the guidelines being passed down to slow the spread of the virus are necessary, but come at the expense of our constitutional rights. A prime example would be this situation involving the Raleigh NC police—-exercising first amendment rights being called “nonessential” and brings into question 18 US Code 242: Deprivation of Rights Under Color of Law.
- Christian, Auburn, AL
Tangle: The enforcement of stay-at-home orders is something that’s getting more and more attention as the weeks go on — and the question of their legality has been raised in various corners of the internet. It’s possible I cover some of this more in-depth tomorrow, as I did last week, but the protests popping up around the country also seem to be increasing in number, even though they are apparently funded by gun rights groups and probably not representative of how most of the right feels about quarantine.
More specifically to your question: let me just say that quarantine sucks. And I, too, hate being told what to do by governments, cops, etc. So I (kind of) sympathize with these protesters. I have this knee-jerk reaction to want to hate the stay-at-home orders because they are forced on me by “The Man.” But, I’ve got some bad news for you. So long as the stay-at-home orders come from the states, they are perfectly constitutional. What’s really happening regarding this pandemic is state rights and federal rights are being conflated. In March, the conservative outlet The Free Beacon published an article questioning whether California Gov. Gavin Newsom was constitutionally allowed to issue a stay-at-home order. The article only cited one or two “health law specialists” and frequently mixed up the idea of a governor-ordered stay-at-home restriction with a federally ordered stay-at-home law. It also discussed the CDC’s legal authority to stop the communicable spread of diseases between states, but accurately noted that authority has never been tested.
Then, when Trump claimed that he had “total authority” to reopen states or issue a national stay-at-home order, there was immediate pushback. But a lot of people inaccurately interpreted that pushback as evidence that stay-at-home orders were unconstitutional or illegal. The reality is those orders are only unconstitutional if they come from Trump or the federal government — not if they come from governors or state legislatures, which is what’s actually happening right now.
Conservative writer David French wrote eloquently about this in his publication The Dispatch, which — like Tangle — lives on Substack.
"Going all the way back to 1824, the Supreme Court has noted that states have the power to impose 'quarantine laws' and 'health laws of every description,'" he noted. "In theory, Congress may use its power under the Constitution's Commerce Clause to grant the president additional authority over commerce during a public health crisis, but it has not done that. Thus, the true executive authority of state commerce rests with governors."
In other words, as Reason’s Billy Binion put it, the federal government can print money or start wars, but it can’t tell you to stay in your homes. Only governors can do that.
All that being said, it’s not a completely black and white issue. Legal and constitutional matters seldom are. Oftentimes, constitutional law becomes established when it is applied to a scenario the law may not have been able to predict. You probably hear a lot about “precedent” when constitutional laws are referenced. Well, coronavirus is a precedent-setting type of event. This is the kind of historical moment where the constitution and the laws we have will be pushed to the edges and precedent will be established. Unlike Free Beacon, Forbes did a great job distinguishing between state and federal law and explained why things might get testy. Forbes had to go all the way back to a Supreme Court case about mandatory vaccines from 1905 to find some precedent relevant to what we’re seeing today.
Even in our current situation though, the power of the government is limited. The Court warned [in 1905] that some restrictions may be so “arbitrary and oppressive in particular cases as to justify the interference of the courts to prevent wrong and oppression.” The Court added: “if a statute purporting to have been enacted to protect the public health, the public morals, or the public safety has no real or substantial relation to those objects, or is, beyond all question, a plain, palpable invasion of rights secured by the fundamental law, it is the duty of the courts to so adjudge, and thereby give effect to the Constitution."
What does this mean? Basically, it means the law we have and the precedent we have seems to allow stay-at-home orders for the prevention of a pandemic, which would be a clear cut compelling government interest. The only way states could get into trouble is if the stay-at-home orders they issue cannot be narrowly defined as addressing coronavirus.
Orders that would be struck down by the court may include racially motivated ones, like if a state governor tried to keep Chinese-Americans home but not everyone else. An order that justified some public gatherings over others could be blocked by the courts, too, as would anything that has a whiff of political favoritism, Forbes reported. But so far, the stay-at-home orders we’ve seen appear to be constitutionally sound. State governments have a real threat on their hands, and they have sound science and law on their side about how to mitigate that threat.
For what it’s worth, the obvious tipoff for this conclusion is the scarcity of actual legal challenges we’ve seen to the orders. If they were illegal, they’d be getting run through the courts in every state. A cursory search on my end found one notable challenge to the stay-at-home orders in Texas, where a group of pastors is going to court over churches and gun shops being closed. But again, that challenge is quite specific to whether those businesses should be deemed essential — it’s not a challenge as to whether a state or local government can order everyone to stay home.
A story that matters.
Celebrity doctors and health care professionals are going head-to-head for the nation’s trust. On television last week, some of the most recognizable people with the word “Doctor” in front of their names endorsed an end to stay-at-home orders and a reopening of the economy: Dr. Phil, Dr. Oz and Dr. Drew. Dr. Phil, who has a Ph.D. in clinical psychology but no license to practice medicine, went on Fox News and compared the number of coronavirus deaths to people dying in car accidents or from drowning in swimming pools. Dr. Oz, the famous surgeon who has promoted pseudoscience on his cable television show, said we should reopen schools and it "may only cost us 2% to 3% in terms of mortality." Observers were quick to note that 2-3 percent would equal millions of children or adults dying. Dr. Oz tried to clarify, saying he “misspoke” and his goal was to ask "how do we get our children safely back to school."
Dr. Drew, also known as Drew Pinsky, was one of the first to speak out and claimed the real threat of coronavirus was the media panic. He claimed it was “way less serious than influenza.” Dr. Drew recently apologized. "My early comments about equating coronavirus with influenza were wrong. They were incorrect. It was part of a chorus that was saying that and we were wrong. And I want to apologize for that. I wish I got it right, but I got it wrong."
The three doctors, all more famous than epidemiologists like Dr. Anthony Fauci or world-renown researchers studying coronavirus, have offered conflicting advice and guidance to national audiences. While they push for the economy to reopen, health experts say lifting social distancing guidance too early will lead to a huge resurgence of coronavirus and could kill hundreds of thousands of Americans. But many in the U.S. see the word “doctor” and assume it means “expert.” The battle for public opinion is now being waged between TV doctors and the ones actually fighting coronavirus. Click.
Biden hits back.
Last week, I shared the devastating Trump ad about Joe Biden, and highlighted Trump’s apparent plan to brand him as being soft on China by calling him “Beijing Biden.” On Friday, the Biden campaign responded with an ad of its own, this one a 90-second hit highlighting Trump’s missteps on coronavirus.
- 15. The number of confirmed coronavirus cases in America on February 19th.
- 13,229. The number of confirmed coronavirus cases in America on March 19th.
- 746,279. The number of confirmed coronavirus cases in America on April 19th.
- 57%. The percentage of mothers of kids under the age of 18 who reported worsening mental health during coronavirus quarantine.
- 32%. The percentage of fathers of kids under the age of 18 who reported worsening mental health during coronavirus quarantine.
- 62% and 53%. The approval rating for Elizabeth Warren as Vice President in polls of the swing states Wisconsin and Michigan, respectively, the best-combined rating of any potential nominee in the survey.
- 48-45. Trump’s approval rating over Hillary Clinton amongst whites with college degrees, according to 2016 exit polls.
- 55-37. Joe Biden’s approval rating over Donald Trump amongst whites with college degrees, according to a new WSJ/NBC poll.
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Have a nice day.
Speaking of money, several readers wrote in last week asking if there were programs set up for them to donate their $1,200 stimulus check to someone or some organization who needs it more. I looked into it over the weekend, and while there isn’t a direct method for donating the check, here are a few ideas if you’re interested. Each of these organizations has been vetted by independent charity watchdogs (and me):
- If you want to directly support Americans, Feeding America has a dedicated COVID-19 fund to help local food banks that feed struggling Americans. Click.
- If you want to do something more global, the United Nations and the Swiss Philanthropy Foundation created the COVID-19 Response Fund. Click.
- If you want to support developing nations, Partners in Health is providing long-term care and attempting to test 200,000 people for coronavirus in those countries. Click.
- If you want to help New York City, which has been hit harder than any other city in America, you can donate to Citymeals, which is helping the elderly in New York get food. Click.
- Finally, experts say the best kind of donation is often “direct giving,” or simply sending funds to someone you know who is in need. If you have a friend, family member or colleague who was recently laid off, consider setting them up a GoFundMe or simply passing your stimulus check over to them.